Book Review: ‘Ireland’s Economic Crash: A Radical Agenda for Change’, Kieran Allen, The Liffey Press, Dublin 2009.
Responding to the Crisis
25 August 2009
Perhaps the best part of the book is the criticism Allen directs to the barrage of propaganda which workers have faced attempting to justify the attacks on their living standards and position in society generally. Workers in the firing line generally don’t fall for this propaganda but it nevertheless often leaves them politically defenceless and can be potent in isolating sections or particular groups from wider sympathy, support and solidarity.
The first myth is that Irish workers are paid too much and that they need to accept wage cuts to increase the competitiveness of the economy, which attracts multinational companies or supports indigenous ones, so that in either case they create jobs to replace those currently being lost.
Allen shows how the ‘experts’ calling for this have been spectacularly wrong and their claim to any ‘scientific’ content for their views is dishonest. He shows that Irish wages are not significantly higher than comparable countries but are obviously higher than those in Eastern Europe and of course those in China, India or Vietnam. Is it a case that wages have to be cut to these levels to be competitive?
He points out that the best export performers also pay some of the best wages, so there is no automatic correlation between low wages and high export performance. Will not other countries also cut wages to increase competitiveness leaving Irish workers poorer but no more competitive? He advances other arguments such as the possibility that export markets may not simply be there or that protectionism might create barriers to their exploitation. He also, too enthusiastically, endorses Keynesian arguments that bring him close to the underconsumptionist argument we discussed in the first part of this review.
His strongest argument is not however the one he finishes on – that winning a battle for competitiveness will leave Irish workers poorer. The Celtic Tiger has demonstrated that Irish workers dependent on capitalist economic development utterly dependent on foreign investment is incapable of delivering sustained and secure prosperity. It is not a matter of getting competitive and then reaping the rewards, the reward is perhaps to have a job, and the low taxes that are also necessary to attract multinational investment means also accepting inadequate social and public services.
It is obvious to everyone that cutting wages will make Ireland Inc. more competitive and that this increases, but does not guarantee, that outside investment is more likely. The point is that we have followed this policy for decades. It led to stagnation and mass emigration in the 80s and success in the 90s, a success that could not be sustained and ended in the bust we are now in. It is not so much a myth as a failure. Socialists don’t tell workers that lower wages will not make them more ‘competitive’, although there is absolutely nothing wrong with Allen’s arguments exposing the lies that back this up, but that fundamentally being competitive is against their interests, that they need to oppose the system that demands competitiveness and that there is an alternative, a socialist one.
Allen demolishes the assertion that the public sector in Ireland is bloated and that public sector workers are paid too much. The State sector has indeed grown, but from a low base and more or les in line with a growing population and growth in the size of the economy. It is difficult to compare public sector jobs with private sector ones in order to compare wage levels and claims to have done so are to be treated with scepticism, since assumptions are often necessary which result in conclusions that are already contained in the assumptions. In any case the ‘free market’ bid up private sector wage rates during the boom and under capitalism in order for other employers, including the State, to retain and attract workers the only mechanism is raising wages. This is what the Irish State did. It followed the rules of the market, so the ‘free markets’ ideologues can hardly turn round now and complain about how their beloved system works.
Allen condemns NAMA for the enormous rip-off that it is and is particularly good in demolishing the pretence of the Government that is has a smart plan for a smart economy. He rightly argues that this smart plan is simply another element of the Irish State’s dependence on multinational capital. For us, it attests further to the imperialist subordination of the economy of the Irish State, which conflicts with Allen’s ideas of it as an independent, if small, capitalist economy. The crash has shown Allen’s ideas on this to have been wrong and the protracted crisis will further subordinate the Irish State to imperialist capital and further expose as false his argument that the Irish State is not a semi-colonial one.
The final myth he demolishes is the most important one: that we must all share the pain of the economic crisis. Unfortunately he neglects to put the trade union bureaucracy in the frame as those who are the most dangerous advocates of this particular myth.
The whole point of the book is to present an alternative, hence the books subtitle – ‘a radical agenda for change.’ Radical yes, but socialist? Allen says his ‘radical solutions also demand that we step beyond the parameters set by a for-profit economy’, yet we are offered nine steps to ‘reform’ this economy. Ambiguity tumbles into confusion just when clarity is most needed.
Perhaps the most confusing statement is that on page 158 where he states that the measures he now advocates must come from a state that follows a ‘rupture’ in society, caused by the workers movement, in which we move from capitalism to socialism. ‘When we make reference, therefore, to the state taking measures to alleviate social suffering in the proposals which follow, we refer to a state that arises from these struggles and which represents an entirely different class interest to the present one.’
In normal socialist discussion this is called a socialist revolution. To present nine steps of reform to deal with the current crisis which first assume such a revolution is to assume the problem away in the first place and therefore to give no answers at all. What workers might do after a revolution is the purest speculation if it isn’t based on what they are required to do to have one in the first place. As it stands Allen’s position is simply incredible. So much so that it cannot be taken seriously.
This prerequisite is not put forward in any of the other programmatic documents or discussions put forward by Allen, the SWP or its electoral front – People before Profit – as far as this author is aware. The confusion is deepened further when he states that his proposals ‘combine, therefore, a vision of what a different society might look like, with certain policies which can be fought for now.’ (p.159) We aren’t told which of his proposals are only visionary and which form a concrete call to action.
This confusion about programme, what workers are called upon to fight for, is the product of a specific historical weakness of the Socialist Workers Party. Despite often being described, sometimes by its own members, as a Trotskyist organisation, in at least one respect it has always consciously rejected Trotskyist politics. This rejection consists of opposition to transitional programmes i.e. political proposals put forward by socialists which address the immediate needs of the working class and which point towards conquest of political power by the workers.
It is called transitional because it provides the means by which socialists seek to educate in struggle workers so that they come up against the barriers of capitalist rule and see the need and the mechanisms to establish their own power. It provides a bridge between purely reformist demands which in themselves do not question the fundamentals of the existing power relationships and the demand for a socialist revolution and the complete transformation of these relationships of power.
The specific demands and content of a programme depend on circumstances, on the exact nature of the society, the political forces involved, character of the crisis etc. – there is no set of pat answers waiting to be lifted off the shelf. It is not a matter of applying universal solutions to particular crisis but of drawing out of particular crises the universal elements that constitute the socialist perspective of establishing a workers’ republic.
The method of transitional politics behind whatever particular tasks face the working class is to fight for the independent self-organisation of the working class so that in the course of struggle this can find its highest expression in workers establishing their own state power and proceeding to build socialism. Transitional politics therefore are motivated by a vision of what a future socialist society will be like and by immediate reforms to protect workers in our present society but they attempt to link the two in a political process through a programme – a set of demands and tasks that workers must take up; fight for and resolve.
Allen’s politics offers only a rather stunted vision of what a workers republic would do along with very unclear proposals about what they should being doing now. In reality, as other SWP and SWP literature demonstrates, his demands about what the State should and should not do become demands about what the existing state should do, not what a putative future workers state would do some time in the future. The latter is obviously not an answer to the immediate crisis.
This does not mean that some of Allen’s proposals are not valid. Workers should call for repudiation of the bank guarantee scheme with protection only for relatively small depositors. Workers should oppose recapitalisation of the banks and those capitalists who are shareholders or holders of the banks’ debt should be made to pay for their failed investments. A good bank should be created with the assets of the developers and speculators as initial capital to provide funding for useful economic development, not wild property speculation.
These demands however are only of any use because they arm workers to fight the cuts demanded of them to pay for bailing out the banks and because they show workers that there is an alternative, a socialist one. Too often the demands of Allen and the SWP come down to nationalisation of the banks with sometimes a rider that there should be some sort of democratic control involved. But nationalisation, i.e. takeover by the capitalist state, is not socialism, as the nationalisation of Anglo-Irish bank so clearly demonstrated. Today in Ireland nationalisation has simply become another mechanism proposed by many to bail out the banks and get the workers to pay for it.
Nationalisation is so often thought of as socialism only because reformist parties i.e. those who believe it is possible for the capitalist state to bring about socialism, have established the idea that somehow state ownership is socialist. Partly this confusion arise because socialists oppose the privatisation of already state owned enterprises or services. We do not do so however because these are socialist. We do so because state ownership, in historical terms, is recognition within the capitalist structure itself that the system cannot function according to its own rules of private property in the means of production
At one level state ownership is an anticipation of socialism, but so also are joint stock companies and centralised banking, which already socialises credit, one of the reasons Allen supports a State bank. While in historic terms these might all be ‘anticipations’ of socialism they are not socialism itself and are not what we fight for.
Their ‘anticipatory’ character is partly revealed in the fact that, as every worker knows, there are usually more limits on the degree of exploitation and oppression in public sector employment than that in the private sector. One does not have to swallow reactionary propaganda about the ‘cushy’ public sector to know that the whip of the capitalist market is not so immediately harsh. Often decisions in public sector enterprises are taken for political reasons and workers can see this clearly. Such decisions are obviously social ones, not hidden behind the workings of the ’invisible hand’ of the market, and workers take opportunities to influence them to their benefit.
Nationalisation therefore is only any use to workers to the extent they can impose their own will over an enterprise, and what matters here is not so much the nationalisation bit as the rider often added, which is workers control. What matters is that workers begin to take control of society, and importantly their workplace. Too often the SWP limits itself to calling for nationalisation as if on its own this was both socialist and a solution. With many capitalist commentators and parties calling for nationalisation it is more than ever necessary to use language and concepts that show that what socialists advocate is very different,
The difference is not that we advocate long term nationalisation and some mainstream economists, the Labour Party and even maybe Fine Gael, advocate purely temporary nationalisation. We advocate that the capitalist owners be expropriated, not protected or relieved of their losses. The point is not just to do this but to encourage workers to take control. We therefore advocate that workers take control of the banks and start to determine what they do. Again too often some socialist organisations advocate workers control but don’t say why? What for? Why is it necessary? It sometimes reads like a formula whose authors have forgotten why they advocate it.
In current circumstances workers control is immediately required to reveal the true extent and value of the bad debts we are being asked, through NAMA, to pay for. Revelation by bank workers of the true value of the rotten loans we are being asked to pay for could play a major role in detonating widespread opposition to NAMA which would sink it almost before it gets started. Revealing the dirty and corrupt relationships between the different parts of the ruling class in this country – the bankers, developers and politicians - would go a long way to educating workers. A few leaked emails that became a flood would do more to advance the workers cause than the recent nationalisation of Anglo-Irish. It would be a tremendous demonstration of the power of even limited working class action.
The reason for advocating that workers take control is that workers are the only ones with an interest in employing bank assets to stop the increase in unemployment and fund an economic development that meets the needs of society and not the profits of a few. The existing bank owners and directors are more interested in hoarding capital, overcharging their customers, screwing small business, putting their money into safe State debt and looking for the next class of asset that will boom like a bubble before eventually bursting like the property market. More immediately the demand for workers control is to prevent us all from being ripped off.
It is therefore important whether one thinks nationalisation in itself is progressive, and that any additions to it such as workers’ control or ‘oversight’ by ‘elected representatives’ and bank workers simply make it more so, or whether one believes that it is in increasing and extending workers power that the only solution lies. Those who might think that this is merely the splitting of hairs must believe that it doesn’t matter whether the capitalist state does something or the working class does it instead, that both will do exactly the same things, for the same reason and with the same results. The repeated dropping of any qualifier calling for capitalist state ownership as a solution is evidence that much of the ‘left’ is not actually fighting for socialism.
This approach also makes it all too easy, in fact it makes it inevitable, that one will seek and find oneself in alliances with those also calling for nationalisation who have not the slightest desire or intention of seeking workers control or ownership of the banks. Kieran Allen and the SWP will easily find themselves in alliance with right wing forces such as Sinn Fein or trade union leaders whose idea of a solution is to champion Irish capitalism against its multinational competitors. That Allen’s political tendency thought it had an unrivalled appreciation of ‘socialism from below’, opposition to state capitalism and opposition to radical sounding but actually right wing republican politics shows that good intentions don’t guarantee good politics. The logic of taking up a certain political stance will force one to go tomorrow where yesterday one would have strenuously denounced.
A number of other remarks by Allen make it more and more clear that his programme of reforms are simply reforms of capitalism. Thus he advocates a greater role for the public sector and its reform to eliminate excessive bureaucratisation. Since a successful capture of political power involves the mass mobilisation and activity of the immense majority of the working class in determining their own lives, talk of reform of the public sector and ‘monthly meetings’ where workers might ‘propose changes in the organisation of the service’ are, on the face of it, really rather reactionary. (pp. 181 & 184) Proposing putting union representatives on the boards of state agencies needs to say how we won’t be repeating the current experience in which state appointments are rewards to union leaders who have done the state some service in inverse proportion to the service done to their members. Allen’s proposals only make any sense if it is assumed they are demands for workers to raise before capturing political power. Their statist character is simply glossed over by his opening affirmation that a new workers’ state is in place first and is no more than an alibi to present to a socialist jury.
Allen finishes the book where we said it had to start; start in the sense of understanding the task of the book and not particularly in presentation. Unfortunately when he arrives at this point we get conjecture over mass psychology, not as a supplement to class analysis, but largely in its place. He is absolutely right to say that ‘contrary to economic determinist thinking, people do not automatically revolt when they see their world crashing around them because poverty and hunger can be great pacifiers.’ But he then analyses potential paths of political development in terms of the twin emotions of fear and anger.
The SWP has specialised in trying to be the angry party, in order somehow to be seen to embody workers’ anger at various aspects of Irish society. This has included calls for the rich and corrupt to be jailed and not merely exposed by the various tribunals. Unfortunately while it is one thing to point out the hypocrisy of the State in jailing the poor for the least misdemeanour and finding all sorts of reasons for letting the rich walk fee, it is not at all the same to peddle illusions in the capitalist state by calling on it to abrogate yet more power to itself. Has it not already been declared by a government official that it might be necessary to jail a banker in order to get workers to accept the bank bail outs? This prioritisation of anger over politics is in essence reactionary.
So we have the curious speculation that the class struggle may develop in Ireland today as it did in the US in the nineteen-thirties, which experience is positively compared to Germany of the same period. This despite the fact that Allen notes that the American trade union leaders were co-opted by the Democratic Party. Such positive comparison gives further cause for concern that the SWP can see no further than populist capitalist politicians using crises to capture and defeat working class militancy. These examples show that neither fear nor anger are any answer and that class consciousness and organisation are decisive. These come together in a political programme, but also in an assessment of the various forces involved in society, answering the questions - who are the workers friends and who are not?
The initial burst of anger from Irish workers which culminated in the mass demonstration in February has not been built on and has not led to increased organisational capacity or clearer political consciousness. If anything workers are now more angry and fearful about their living standards, about the next budget and the ones after it, and the effect of NAMA in ripping them off. Yet their union leaders are to the right of all the Dail opposition parties in supporting it.
Jack O’Connor of SIPTU for example hides his effective support for NAMA behind rhetoric about it being almost certain to be pushed through the Oireachtas and about it not being possible to block it, while diverting opposition into nonsensical calls for a ‘social dividend.’ NAMA involves only one thing – getting the working class to pay for the economic crisis, to talk of a ‘social dividend’ is simply absurd. It is simply impossible to protect workers living standards while slashing their wages and public services, yet this preposterous perspective is held up by the State’s leading trade union as the way forward. It has only one purpose – to obfuscate and frustrate resistance and ensure that the government’s plans succeed. It should therefore be clear that fighting against the trade union leadership is absolutely crucial to defending workers interests. Yet repeatedly in this book their role is ignored or minimised.
So at the end of the book when Allen notes that ICTU called off strikes and accepted that workers would have to pay for the crisis he describes their role as ‘ambiguous and cowardly.’ There was no ambiguity about it – they didn’t say maybe we’ll call off the strikes or maybe workers should pay for the mess. Describing them as cowardly makes it appear that once again it is only a question of character or emotion, if only they were more courageous. In fact, if they were more courageous they would attack workers more vigorously. It is not therefore a question of courage.
Allen presents himself as a Marxist but Marxists first and foremost look for material reasons for groups’ behaviour, especially when it involves the behaviour of a whole social layer over a long time. Yet Allen puts this down to ‘misunderstanding’, forgetfulness or perhaps ‘lack of imagination’, ‘fear’, ‘timidity’ and ‘incompetence.’ He appears to repeat the widespread lie that social partnership grew up when outright cuts in living standards were not on the agenda but only in a boom when at worst tax cuts were exchanged for pay increases. In fact partnership was adopted by the trade union leaders in the late 1980s in order to implement such draconian cuts that the health services, for example, have never recovered.
Without understanding the role of the present leaders of the workers’ organisations it is therefore Allen’s proposals which are ambiguous and cowardly. He calls for increased grassroots organisation because of the cooption of many by social partnership but the book doesn’t analyse how partnership played this crucial role. He correctly calls for workers to take back their unions from paid officials but this he suggests must come from ‘electoral contests or through deeper, structural changes.’(p.205) So which is it? Both? What sort of ‘deeper, structural changes’?
Organisational form is intimately tied to the purpose to which an organisation is put. In other words it is the political purpose of an organisation that determines its structure, but Allen’s politics provide little guide to answering our questions. He calls for ‘people power’ but this is a very old and usually deliberately ambiguous word which pretends to erase the class divisions within ‘the people.’ It is not given any positive political content whatsoever by calling for the ‘emergence of a radical left.’ (p.206) This so-called left has included the Green Party and Sinn Fein for example and each has been in government and shown its true colours.
The third part of his alternative way forward is ‘socialist politics’ but, since the whole book is really about what he understands this to be, nothing is added by the less than five pages on this at the very end of the book. His summation that ‘socialism means taking such corporations into public ownership’ (p. 208) is simply wrong. His brief comments about workers control, in which workers should (only ‘periodically’) ‘discuss how they run their enterprises’ is too perfunctory to be central to his ideas about an alternative, something he confesses by admitting his proposals are ‘sketchy’ and have a ‘certain utopian quality.’ After over two hundred pages of a book subtitled ‘a radical agenda’ this is really not good enough.
This book will find its way to readers with no real knowledge or acquaintance with socialism. It may, for them, awaken some realisation that there is an alternative to the capitalist solutions being put forward to this crisis, which all involve workers paying for it. To this extent the book may do some good. Unfortunately it does not lead workers on the right road which this alternative must take.